AMZN Rises On Kindles, Tablet; BKS Falls 8%; A Letter From Bezos

By Tiernan Ray

Amazon.com’s CEO Jeff Bezos on Wednesday morning unveiled a new tablet called “Fire,” but also two updates to the company’s black-and-white Kindle e-readers. Amazon shares rose 4% following the event.

Amazon.com (AMZN) shares are up $7.28, or 3.2%, at $231.49 this morning as the company kicks off its special media event in New York City to introduce something or other — much better than the market’s fractional increase this morning.

Mind you, we live and work in New York City here at Tech Trader, but we’re not nearly all that enough to merit an invitation to the live event. So, we’re relegated to watching from afar, like you.

The event will most likely feature some slow-motion demonstrations of what was written up by Bloomberg’s Danielle Kucera and Brad Stone this morning, namely that the company’s 7-inch tablet computer is called the “Kindle Fire” and will sell for $199, which turns out to be even cheaper than rumor had had it.

Update: In a surprise to tablet fans awaiting the big moment, Amazon CEO Jeff Bezos has unveiled onstage not a tablet but an updated version of the Kindle, called “Kindle Touch,” one without a keyboard, similar to Barnes & Noble’s (BKS) “Nook” e-reader. The device will cost $99, less than the $139 at which Barnes prices the Nook. A second model will feature free 3G wireless connections, for $149. Bezos also revealedA new lighter Kindle that has no touch capabilities and plain old buttons on the face of it, that will go for $79, Bezos announced. Bezos followed the Kindle announcements with discussion of the Fire tablet, which has a 7-inch screen and a dual-core processor, and WiFi connectivity, but no option for 3G. A bookshelf user interface allows one to flip through content on the tablet, which includes not just downloaded books but also all the other content from Amazon, such as movies and music. The device also introduces a new Web browser from Amazon, called “Silk,” which Bezos said will do the vast majority of the processing of Web pages in Amazon’s data center, to make the browsing experience smoother on the tablet. The device will sell for $199, as expected, and ships on November 15th.

Amazon shares are up $7.65, or 3.4%, at $231.86.

Update 2: Whatever concern the new tablet may cause Apple (AAPL), it has really thrown Barnes & Noble stock for a loop: the shares are down $1.05, or 8%, at $12.16 this morning, and fell as low as as $11.93. The Street has started to offer some early commentary on the products, most of which is positive.

Update 3: Amazon has taken over its home page with a letter from Jeff Bezos summarizing today’s announcement and taking aim at Apple’s prices:

Dear Customers,

There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.

Below is the full letter as printed on the Amazon home page (if it appears somewhat cut-off in your browser, you may want to click on the headline of this post, which will display the post with greater width, therefore showing more of the image):

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